Quota of work permits for foreign nationals set for 2005

In March 2005, following consultation with the social partners, the Slovenian government adopted the 2005 quota of work permits for non-EU foreign national who require such permits. The figure is set at 16,700 work permits - lower than the 2004 quota, which was not met. In addition, the employment of foreign workers not requiring work permits is expected to increase in 2005, although it was much lower than expected in 2004.

On 4 March 2005, the Economic and Social Council of Slovenia (Ekonomsko socialni svet Slovenije, ESSS) (SI0207103F) confirmed a proposal from the Ministry of Labour, Family and Social Affairs (Ministrstvo za delo, druzino in socialne zadeve, MDDSZ) for an Order on the determination of the quota of work permits for foreign workers for 2005, and on 17 March the Government adopted the Order. This sets a quota of 16,700 work permits for foreign citizens needing certain types of work permits for employment in Slovenia. According to Article 5 of the Law on the Employment and Work of Aliens (LEWA) (adopted by parliament on 14 July 2000 and in force since 1 January 2001) the quota of work permits is determined by the government annually and may not exceed 5% of Slovenia's active working population (labour force).

The quota is mainly intended to limit the number of foreign workers who will not definitely remain in the Slovenian labour market. Therefore the quota does not include foreign workers in possession of a 'personal work permit' (foreign nationals in possession of a permit for permanent residence in Slovenia etc). The work permits issued to the citizens of those 'old' EU Member States that have restricted the access of Slovenian workers to their labour markets for a transitional period are not included in the quota.

According to data from the Statistical Office of the Republic of Slovenia (Statisticni urad Republike Slovenije, SURS) as at November 2004 the active population in Slovenia stood at 880,596 (these data are not obtained from the Labour Force Survey). This means that maximum quota work permits, as determined by the LEWA, is 44,030 for 2005. The quota actually determined by the new Order represents 1.9% of the active population of Slovenia.

The 16,700 work permits for 2005 have been distributed as follows:

• employment of foreign nationals - 12,200 permits for employment;

• seconded foreign nationals - 1,200 permits for work (a seconded worker is a person who is in an employment relationship with a foreign employer during the provision of a contractual service in the territory of Slovenia and for whom the employer pays social insurance contributions);

• training and advanced training - 200 permits for work;

• seasonal work by foreign nationals - 2,000 permits for work (1,700 permits in the construction sector, 200 in the agriculture and forestry sector and 100 for other seasonal work);

• individual services provided by foreign nationals - 100 permits for work; and

• reserve - 1,000 work permits (these unallocated permits are intended for additional allocation for the abovementioned purposes in the event of 'serious disturbances' in the labour market).

The quota is determined in a flexible manner, and 16,700 represents the average yearly number of valid work permits. In the event of 'serious disturbances' in the labour market, the MDDSZ can reallocate the above quotas for particular purposes to other such purposes. If it is not possible to tackle the disturbances in this way, the MDDSZ can allocate the reserve of 1,000 work permits to any of the mentioned purposes.

Reasons for the quota

Since Slovenia joined the European Union on 1 May 2004, there has been free movement of workers between the 10 new EU Member States. This means that workers from the other new Member States do not need a work permit for employment in Slovenia and therefore compete on an equal footing with Slovenian nationals in the Slovenian labour market. Almost all the old Member States restricted the access of Slovenian workers to their labour markets for a transitional period. The exceptions are Ireland, Sweden and the UK, which totally opened their labour markets to the new Member States. This means that workers from these three countries do not need work permits for employment in Slovenia. Citizens of those old Member States that have restricted the access of Slovenian workers to their labour markets do require work permits to work in Slovenia (though these permits are not included in the quota).

An increase in the employment in Slovenia of workers from the other new EU Member States is expected, primarily from Slovakia and Poland, because pay in Slovenia is much higher than in these countries.

In addition, free movement of services is now in force among all 25 EU Member States (except Austria and Germany, which have restricted the provision of services in certain sectors). This allows foreign firms to offer services in Slovenia with their own workers.

Because of these expected increases in workers from elsewhere in the EU, in 2004 Slovenia for the first time restricted by quota the number of certain types of work permits for other foreign workers (those included in the annual quota). For 2004, a quota of 17,100 work permits (1.97% of the active population) was determined. However, only 15,092 work permits (of the types included in the quota) were actually issued. When lowering the quota for 2005 to 16,700 work permits, the government considered the following facts:

• the quota for 2004 was not filled;

• the employment of foreign workers not needing work permits is expected to increase in 2005, although it was much lower than expected in 2004; and

• migration policy and conditions and fluctuations on the labour market.

Employment of foreign workers

Foreign citizens employed in Slovenia with the types of work permits included in the quota are mainly from the independent states that emerged from the former Yugoslavia. As at 31 December 2004:

• concerning all types of work permit, out of 39,030 valid permits, 36,219 were issued to citizens from these countries (Bosnia 19,807, Croatia 6,766, Serbia and Montenegro 6,458, and Macedonia 3,188);

• concerning only the types of work permits included in the quota (ie excluding 22,712 personal work permits), out of 16,318 valid permits, around 14,409 were issued to citizens from these countries (Bosnia 8,087, Croatia 1,538, Serbia and Montenegro 2,850, and Macedonia 1,934).

Employment of foreign workers not needing work permits

After 1 May 2004, the employment in Slovenia of citizens from the other new EU Member States and from Ireland, Sweden and the UK was below expectations. The amount of 'contractual work' (work without the conclusion of an employment contract) and the level of provision of services involving foreign workers was as expected.

According to data from the Employment Service of Slovenia (Zavod Republike Slovenije za zaposlovanje, ZRSZ), there were altogether 2,819 workers from the other EU Member States who registered for employment, work or provision of services in Slovenia in the period from 1 May to 31 December 2004 - Slovakia 1,404, Poland 352, Italy 322 (mostly services), Austria 230 (mostly services) and the Czech Republic 106.

Regarding employment, most of these foreign workers were employed in the construction sector (eg Slovakia 144, Poland 31), followed by the following occupations: driver (eg Czech Republic 24, Slovakia 24); female dancer (eg Czech Republic 27, Slovakia 26); butcher (eg Slovakia 25, Hungary 14); welder (eg Poland 18, Slovakia 15); and locksmith (eg Slovakia 19, Poland 10).

Regarding the provision of services, the number of workers providing them was the greatest in the following sectors and occupations: construction (Slovakia 533, including 105 masons and 78 carpenters); entertainment (Italy 126, UK 31); auxiliary workers (eg Slovakia 146); workers in amusement parks (eg the Netherlands 45, Poland 13); fitters (eg Austria 31, Poland 27); and welders (eg Slovakia 25, Poland 23).

Social partners' comments

The ESSS discussed the draft Order on the 2005 quota of work permits at its 130th session on 4 March 2005. The employers' and trade union representatives on the ESSS agreed with the proposed number of work permits. However, the employers had comments on the effectiveness of the Slovenian education and training system. This system cannot provide enough qualified workers, especially in certain occupations where there is a labour shortage. Because of this lack, employers must employ foreign workers.

Commentary

The European Parliament has recently given a green light for the entry of Romania and Bulgaria into the EU. On 25 April 2005 accession agreements were to be signed with both countries, with accession scheduled for 2007. It is an open question how this will affect the Slovenian labour market and whether the existing legislation and whether the abovementioned restrictive and other labour market measures are adequate to tackle the possible consequences of future EU enlargement. (Stefan Skledar, Institute of Macroeconomic Analysis and Development)